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Chelmsford gets bids to refinance sewer debt

By Grant Welker, gwelker@lowellsun.com

Updated:
04/05/2013 06:36:29 AM EDT

CHELMSFORD -- Bids were received by the town Tuesday for a $5.3 million bond sale to refinance debt for the townwide sewer system, purchase a 28-acre farm off Pine Hill Road, and pay a portion of the capital budget.

As part of the bond sale, Chelmsford also was lauded by Standard & Poor's for what the credit-rating agency called "strong" financial management practices with a low per-capita debt burden. With no major capital needs in the next five years other than the Billerica Road fire station set to begin construction this year, debt should not be increased substantially, the agency said.

Standard & Poor's also reaffirmed a credit rating of AA, to which the town was upgraded last June from AA-.

"I think it speaks well to the town's position," Town Manager Paul Cohen said. "Hopefully, it affirms to the community that we're sound fiscal watchdogs for the community and that we're acting in a proper manner."

The town received seven bids for its bond sale, with the lowest bid coming in with an interest rate of 1.58 percent. Selectmen are scheduled to approve the bond sale Monday.

The $5.3 million bond sale includes $3.6 in refinanced debt for the sewer-system project, $785,000 for the purchase of the Sheehan Farm and $932,000 to pay for part of the fiscal 2013 capital budget.

Refinancing the sewer system debt with a lower interest rate should save the town an estimated $457,000 during the remaining 11 years of the borrowing, Cohen said.

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Those bonds were first issued in 2004.

The 28-acre Sheehan Farm, which includes three adjacent parcels, was purchased for nearly $1.6 million after receiving Town Meeting approval last October. The remainder of the purchase price was paid for in cash.

The improved credit rating saved the town an estimated $181,000 when last summer it borrowed $9.4 million, including $7.8 million for the new fire station, according to the town.

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